2011 will certainly be remembered as the year of rebellion in the Arab world. Right now, it's a year of possibilities that we can look forward to with a renewed sense of optimism, thanks to the struggles of the people of Tunisia and Egypt and across the Middle East.

Saturday, June 25, 2011

Hussein Salem: A businessman from the times of crony capitalism (Part One)

Al-Ahram, in a four-part series, traces the hidden story of one of the richest men in Egypt, now wanted on charges of corruption

Karem Yehia

Edited and Translated by Mostafa Ali

Hussein Salem

All the king’s men: Who runs Mubarak's' money?

Hussein Salem is one of the richest men in Egypt and one of the closest friends of the ousted President Hosni Mubarak and his family. Salem fled the country days before the ousting of Mubarak. He has been wanted in Egypt for months on multiple charges of financial corruption, some of which is attributed to the below-market-value sale of gas to Israel. No one knew his whereabouts for months. Finally, he turned up in Spain last week. We learned that because the Spanish government arrested him on charges of fraud and money laundering.

Minister of Justice, Mohammed El-Guindi, described Hussein Salem as the man who holds the keys to corruption in this country. Local Egyptian media called him the "black box" of the fortunes and activities of the deposed president Hosni Mubarak in the world of business. The American network ABC News called him the "front man" in a story that attempted to track where Mubarak and his family’s money went.
In a month-long trip of journalistic investigation, Ahram managed to dispel some of the myths and lies that surround this mysterious man. We managed to uncover certain important facts about the man. We also obtained some rare photographs of Salem, which tell us quite a bit about his persona and history.
However, the secrets that surround Hussein Salem remain, by and large, sealed in closed drawers - from the White House and Congress of the United States, to the Royal courts in Persian Gulf countries, passing through several cities in Europe and all the way back to Cairo and Sharm El-Sheikh in Egypt itself.
For example, nobody knows the size of the man's wealth. Nobody knows where his cash is. Does he actually pay taxes? How much does he pay?
Even Said Jameel, the man many sources informed us was Salem’s own personal lawyer, tried at first to deny having anything to do with Salem when we sat down to interview him for this story.
However, we did manage to learn enough about Hussein Salem Kamal El-Din Aboul-Einen, aka Hussein Salem, 77 years of age.
The first and most important fact worth mentioning is that Hussein Salem singlehandedly added new meaning and dimensions to the concept known as “crony capitalism,” or the unholy marriage between private capitalists, financiers and investors on the one hand and government officials on the other, which has become a defining feature of late capitalism, especially in a country like Egypt.

The mystery man

How could government information agencies and mainstream newspapers in a country as highly centralised as Mubarak’s Egypt fail to maintain even simple and basic data about a man like Hussein Salem?
Salem was actually born on 11 November 1933 and not 1928, the same year Mubarak was born, as some papers claimed. He has not served even a single day in the armed forces, let alone any time alongside Mubarak in the air force, as several sources made us believe for quite some time. In fact, for one, Hussein Salem sustained an eye injury during childhood, which prevented him from performing any military service.
Moreover, after the death of his father, who was a school teacher, Salem took on the responsibility of working and providing for his mother (Hosnia Tabozada who was of Turkish origins and Salem’s father’s second wife) and his two siblings - his older sister Thuraiya and his brother Rafiq, 10 years his junior.
As the real record shows, Salem was the oldest child and his family’s provider after the death of his father and therefore could not have served in the military.
Our own trusted sources revealed that Salem was actually born in the neighbourhood of Khalifa in the district of Muqattam, a suburb of Cairo, not in the village of El-Saf near the Helwan suburb of Cairo as Riqaba Idariya (the Egyptian Administrative Control Authority) records indicate.
In fact, Salem’s own father was the one born in El-Saf, Helwan. There, he married a country girl who gave birth to Salem’s five half siblings: Abdel Hamid, Salah, Qadriya, Fawziya, and Samiha - all now deceased.
Samiha actually married into the Arabian tribe of Abaydah which is concentrated in the vicinity of Ismailiya Governorate and extends into the Sinai peninsula. This fact might explain stories that were circulated about his “Bedouin roots”, a rumour that was used to explain his business dealings in Sinai since the late 1980s.
Interestingly, an informed source confirmed that Salem himself weaved this rumour of his kinship with Bedouins in order to firstly solidify his business deals with Bedouin tribes in Southern Sinai, who in turn would guarantee protection for his tourism investments and interests in the area, and secondly, obtain further land concessions from his friend Mubarak and officials in the latter’s administration - all part of the game of crony capitalism.

Archive talk

All these misrepresentations and half-truths which we obtained from reliable sources forced us to take another, closer, look at newspapers’ archival material on the man.
We found out, for example, that no data centres at any of our major newspapers had a file on Hussein Salem prior to the January 25 Revolution and before he fled the country in February 2011. Even the 1992 second edition National Egyptian Encyclopaedia of prominent Egyptians, which is published by the governmental Information Agency and contains biographies of 64 contemporary figures among 4269 public ones, failed to mention Salem, a man at the peak of his financial and political prowess at the time.
With difficulty, one is able to find the man’s name or the name of his son Khaled on some sports pages under golf news and in some stories on oil and tourism, and only in a very limited number of newspapers. Miraculously, we were able to find one interview with Salem in an Egyptian paper, The Economic World Today, dated 17 March 2007.
It was as if someone in a higher office has given strict orders to the media to keep Salem and his family out of newspaper pages during that period.
It was also very difficult to find copies of archived articles or coverage of Salem in the western press, despite the fact that Salem’s name started to be mentioned by western media in the early 1980s because of accusations levelled against him about financial tampering in arms deals. All we were able to find were two interviews with him by American Military Aid Journal and Forbes magazine, dated 31 May 1988 and 17 August 2000 respectively.
Mysteriously, both Forbes and its arch-rival Fortune 500 magazine have no mention of the size of Salem’s wealth or anything about his business partners.
All of these “secret clouds” confirm, as our reliable sources told us, that Salem did not talk much to the press about his life, preferred to stay out of the limelight, and did not even allow people to take his photos in weddings and social gatherings.
Given all that, it is quite significant that unlike men of lesser wealth and influence, Hussein Salem did not publish any public eulogies of the former president Anwar Sadat who was assassinated on 6 October 1981 in any newspaper.
His name, furthermore, would not reappear in the press until 8 September 2008, when Salem, uncharacteristically, published condolences to the family of former minister of defence, Field Marshal Abdel Halim Abou-Ghazala, on his death.
Characteristically, though, Salem used no label or business title for himself in the advertisement, and referred to the deceased Field Marshal simply as “a dear friend.”

A lucky clerk in the Nasser era

Sources who spoke on condition of anonymity, despite this long trail of secrecy and mystery, told us that Hussein Salem graduated from the Faculty of Commerce in the summer of 1956 (weeks before Nasser made the decision to nationalise the Suez Canal and the trilateral attack on Egypt that followed).
Shortly after his father’s death, Salem’s family, now headed by his mother, moved from the Khalifa neighbourhood to an apartment on the top floor of a building located on a small street called Sphinx- near Baghdad Street- in the Korba area of Heliopolis.
Salem’s mother struggled to provide for him and his siblings solely on her late husband’s meagre pension (and even after she sold a five-acre plot of land the family owned and another similar sized plot she personally owned).
Sources say that Hussein Salem was not a talented or bright student. He graduated from Heliopolis Public High School only after having to repeat the final academic year twice. Nevertheless, Salem’s friendship with the younger sons of the wealthy businessman Zuhair Garanah, who was also a minister in Nasser’s first cabinet after the July 1952 Revolution, pushed him in the direction of pursuing a business career.
Unlike his younger brother, Salem did not show any interest in volunteering to join civil defence militias, which Egyptians formed to defend the Canal against the foreign invaders. Sources say that Salem grew up in constant fear of everything after his father’s death of typhoid, and was convinced that he would not himself live past the age of 40. In fact, the story has it that during the entire period of trilateral bombings of eastern Cairo in the fall of 1956, Salem hid under his bed!
There are no indications that Salem opposed Nasser’s decision to nationalise the Suez Canal or any other foreign holdings in Egypt during that period. If anything, Salem expressed resentment among his close friends about Nasser’s decision in 1961 to nationalise the holdings of major Egyptian capitalists- otherwise known as the July Socialist Decrees.
At the time of the trilateral attack on Egypt, Salem had just begun working as a clerk at the Textile Support Fund, which was located in the famous Immobilia Building in midtown Cairo. In some ways, Hussein Salem was a lucky young man. Nasser provided many jobs to young people to combat high unemployment rates among them. Very shortly after graduating from the Faculty of Commerce, one of Salem’s relatives recommended him for work at the Textile Fund. He landed the position, which paid 18 pounds per month- a high amount for a government clerk at the time - and carried with it possibilities of travelling outside of a country that he considered too saddled by a closed economy and scarcity of consumer goods.
Salem definitely enjoyed the fine things in life at the time. He had a passion for watching Hollywood films in the theatre, for Frank Sinatra, as well as for English Victorian furniture. This explains why he furnished his five star hotel, Jolie Ville in Sharm el-Sheikh, in an extravagant Victorian style. Celebrities who attended the opening of Salem’s Jolie Ville in October 1991 are reported to have been impressed with his exquisite taste.
Hussein Salem married Nazimah Abdel-Magid Ismaiil in 1959. The new family moved into a nine-pound per month, three-bedroom apartment across the street from El-Mazah Phone Building in the Golf area of Heliopolis.
According to testimony from a neighbour, who preferred to remain anonymous, Salem owned no cars and showed no signs of wealth for most of the 1960s and 1970s.
It was only in 1977 that things began to shape up for Salem. After returning to Egypt from a short assignment in the United Arab Emirates, he moved with his family from his Golf area apartment into a new unit in an apartment building he constructed in Saba Emarat area of Heliopolis.
He had landed a new job with a salary of 43 pounds per month at the Arab Company for External Trade. However, the birth of his children, Khaled in 1961 and Magda in 1963, strained his finances. Close friends of Salem say that he constantly borrowed money to pay Khaled’s fees at the English private school Saint George in Heliopolis.
Other sources claim that the Arab Company for External Trade was nothing but a front operation for Nasser’s Intelligence Services. A former CEO of the company, who refused to give his name, recalled that Salem was a strangely private employee who travelled on dubious trips abroad on numerous occasions. This source added that, perhaps, Salem was supervising arms deals to support national liberation struggles in North Africa, as part of Nasser’s foreign policy at that time.
Salem’s short-trips, mini-adventures and arms’ deals of the 1960s and early 1970s are of course very small and very different to his extensive arms deals and bigger business partners in the latter part of the 1970s.
However, before we begin to travel along this part of his journey, we will have to make two more stops full of secrets along the way: Baghdad and Abu Dhabi.